More retailers falling victim to organized crime

June 5, 2012

WASHINGTON — Organized retail crime is a growing concern for all retailers, with a staggering 96% reporting that their company has been the victim of a crime in the past year, according to NRF's Organized Retail Crime Survey. This number is up from 94.5% in the past year. In addition, 87.7% say ORC activity in the United States has grown over the past three years.

"What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” said NRF VP loss prevention, Rich Mellor. “Selling this stolen merchandise is a growing criminal enterprise and retailers must remain vigilant as this is an issue that involves everyone's cooperation when it comes to protecting retailer's assets, including their valued store associates and customers."

The silver lining: more companies this year believe law enforcement is aware of and understands the severity and complexity of the issue (40.0% vs. 32.3% in 2011). More than half (54.4%) say top management at their company is aware of the problems associated with organized retail crime.

Cargo theft continues to grow at an alarming rate, posing huge problems for retailers and their distribution centers. On average, 52.1%of companies say they have been a victim of cargo theft in the past 12 months, up from 49.6 percent last year. A significantly higher percent of companies this year said cargo theft occurs mostly en route from the distribution center to the store (68.1% vs. 57.4% last year). Four in 10 (43.5%) say these incidents also occur en route from manufacturer to distribution center and 15.9% say they happen at the distribution center.

The survey also indicates a growing trend in the level of violence retailers see when organized criminal gangs are apprehended (15% of incidents vs. 13% in 2011). Retailers grappling with these violent acts also report that they believe more ORC offenders are engaged in drug activity. Nearly half (49%) of respondents estimate drugs and drug activity are linked to organized retail crime incidents.

When asked what new trends in organized retail crime they have noticed in the past year, retailers cited familiar issues involving the economy, returned stolen merchandise, gift card fraud, and increases in violent activity upon apprehension. However, new to the list of trends this year were specific references to 1.) digital receipt fraud; 2.) increased smash and grab incidents; and 3.) collusion with street gangs.

While organized retail crime is present in all cities, the following 10 are where retailers say the most criminal activity occurs:

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